Lufthansa had the right to pull out of the deal if it did not win EU regulatory approval by a Friday deadline — later extended to Aug. 31

The German carrier's plans to buy the Austrian government's 41.56% take in the struggling national airline for euro366 million hit a speed bump when EU regulators said the company would become a near-monopoly on some routes and could hike fares and reduce choice.

Lufthansa offered to make changes to soothe these antitrust concerns but regulators complained that they were not going far enough.

A new set of concessions handed over last week will now pave the way for the EU to eventually clear the deal, EU Competition Commissioner Neelie Kroes said Friday.

The company said these were "economically acceptable." It had earlier signaled that the EU demands would make the deal unattractive.

Kroes said EU officials had tested these promises with market players — such as rival airlines — and would conditionally clear the bid. EU governments and the European Commission must formally approve it.

Neither Lufthansa or the European Commission have said what the company is promising to do.

The EU executive says the new company could become too powerful on flights from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels. Lufthansa is Germany's biggest airline and Austrian Airlines dominates routes out of Austria.

Lufthansa last month resolved similar EU fears that its bid for Brussels Airlines would make it the only airline running some routes out of the Belgian capital. Regulators approved the deal after Lufthansa agreed to sell off airport slots to rivals — a move that would help rivals launch competing services.

Slots are the daily periods of time that airlines get to land and take off from airports. They are valuable, changing hands for as much as 30 million pounds a pair at Europe's busiest airport, London Heathrow.

EU antitrust officials are separately looking into whether the Austrian government is selling Austrian Airlines at a fair price to Lufthansa. They launched an investigation in February, saying they believed that the price could be too low and may be an illegal state subsidy.

The deal also sees Austria take on euro500 million of Austrian Airlines' debt and leaves the door open to more payments in the future.

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